Aptus Value Housing Finance IPO of Rs. 2780 comprises a fresh issue of Rs 500 crore, and an offer for sale of up to 6,45,90,695 equity shares. The OFS is by promoter Padma Anandan, and investors Aravali Investment Holdings, JIH II LLC, GHIOF Mauritius, and Madison India Opportunities IV. Retail-focussed , Aptus Value Housing Finance IPO is being offered in the price band of Rs 346-353 per equity share.
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Aptus Value Housing Finance IPO Details:
| Bid Opens | Tuesday, 10th August, 2021 |
| Bid Closes | Thursday, 12th August, 2021 |
| Face Value (₹) | ₹ 2/- |
| Issue Details | Fresh Issue of Equity Shares + OFS upto 64,590,695 Equity Shares |
| Issue Size (₹ Cr) | ₹ 2,735 – 2,780 Cr |
| Bid Lot | 42 Shares |
| Price Band | ₹ 346 – 353 |
| Issue Structure : | |
| QIB | 50% of the offer |
| NIB | 15% of the offer ( Approx. 11,856,235~ – 11,813,250^ Shares ) (₹ 410.23~ – 417.01^ Cr) |
| Retail | 35% of the offer ( 27,564,250 Shares, ₹ 973.02 Cr) |
| Applications for 1x Retail | 6.6 Lacs |
Updates :
- ANCHOR ISSUE: Ahead of its IPO, Aptus Value Housing Finance IPO garnered Rs. 834 crore from anchor investors. These include names like Nomura, Copthall Mauritius Investment, Steadview Capital Mauritius, Elara India Opportunities Fund, Edelweiss Mutual Fund, Axis MF and DSP MF etc.
About Aptus Value Housing Finance Limited
- Aptus Value Housing Finance was incorporated in 2009 and is are one of the largest housing finance companies in south India in terms of AUM.
- Aptus Value Housing Finance India primarily serves low and middle income self-employed customers in the rural and semi-urban markets of India.
- The Gross Loan Assets have grown at a CAGR of 34.54% from Rs.2247.2cr, in FY19 to Rs.4067.8cr, in FY21.
- As of FY21, they conduct the operations in the states of Tamil Nadu , Puducherry, Andhra Pradesh, Karnataka and Telangana through 190 branches.
- Aptus Value Housing Finance Limited has a diversified loan portfolio of home loans, loans against property and business loans, which accounted for 51.7%, 21.9% and 26.4% of the AUM, respectively , as of Q4FY21.
- As of December, 31, 2020, 99.42% of the AUM was from customers belong to the low and middle-income group with a monthly income of less than Rs. 50,000.
- Aptus Value Housing Finance has a strong capital sponsorship by marquee investors like Westbridge, Malabar Investments, Sequoia Capital, Steadview Capital and Madison India.
Aptus Value Housing Finance IPO: Financials
| Particulars / (₹ In Cr) | 2021 | 2020 | 2019 |
| Equity Share Capital | 94.93 | 94.51 | 78.78 |
| Reserves | 1,884.52 | 1,614.50 | 619.51 |
| Net worth | 1,979.45 | 1,709.01 | 698.29 |
| AUM | 4,067.76 | 3,178.69 | 2,247.23 |
| Disbursements | 1,298.18 | 1,270.98 | 1,089.04 |
| Revenue from Operations | 636.62 | 500.33 | 323.85 |
| Revenue Growth (%) | 27.24% | 54.99% | – |
| EBITDA as stated | 557.31 | 437.65 | 274.47 |
| Profit Before Tax | 345.09 | 247.29 | 152.71 |
| Net Profit for the Period | 266.94 | 211.01 | 111.56 |
| Net Profit as % to revenue | 41.93% | 42.17% | 34.45% |
| Equity Share Capital | 94.93 | 94.51 | 78.78 |
| Reserves | 1,884.52 | 1,614.50 | 619.51 |
| Net worth | 1,979.45 | 1,709.01 | 698.29 |
| EPS (₹) | 5.56 | 4.77 | 2.83 |
| RoNW (%) | 13.49% | 12.35% | 15.96% |
| Net Asset Value (₹) | 41.12 | 35.66 | 17.73 |
| ROE | 14.47% | 17.53% | 17.38% |
| ROA | 6.46% | 6.95% | 5.91% |
| FV | 2 | ||
| Equity Post IPO | 99.12 | ||
| IPO Price | 353 | ||
| EPS (exclusing EO) FY21 | 5.39 | ||
| PE | 65.54 | ||
| Market Cap | 17495 | ||
| Market Cap / Sales | 27.5 |
Pros
- Presence in large, underpenetrated markets with strong growth potential
- a customer centric organization that has developed strong relationships with their customers by
- Domain expertise built over time resulting in a business model difficult to replicate by others in the company geographies and addressing their concerns in availing housing finance.
- Aptus has developed an in-depth understanding of the requirements of customers in these regions and methods to determine their credit worthiness
- Experienced and stable management team with marquee shareholders
Cons
- The company requires substantial capital for its business.
- Majority of its customers are first time borrowers which increase risks of default.
- NHB consent to undertake the offer is subject to certain conditions.
Aptus Value Housing Finance IPO: Assessment
- Promoters M Anandan, Padma Anandan, and WestBridge Crossover Fund LLC held 60.84 percent stake in the company, while selling investors Aravali Investment Holdings, JIH II LLC, GHIOF Mauritius, and Madison India Opportunities IV held 18.53 percent shareholding in the company.
- Aptus Value Housing Finance is one of the largest housing finance companies in south India in terms of AUM as of March 2021.
- Its AUM have increased at a CAGR of 34.54 percent to Rs 4,067.76 crore during FY19-FY21.
- Since its inception, the company has not restructured any loans or written-off any loans receivable.
- The company targets first time home buyers where the collateral is a self-occupied residential property.
- Loans to self-employed customers accounted for 72.05 percent of its assets under management (AUM), while loans to salaried customer accounted for 27.95 percent of AUM as of March 2021.
| Aptus Value Housing Finance: Some Key Parameters | |||
| FY21 | FY20 | FY19 | |
| AUM (Rs crore) | 4,068 | 3,179 | 2,247 |
| Disbursements (Rs crore) | 1,298.18 | 1,270.98 | 1,089.04 |
| Total Income (Rs crore) | 655.24 | 523.72 | 337.12 |
| Profit (Rs crore) | 266.94 | 211.01 | 111.48 |
| Net Worth (Rs crore) | 1,979.45 | 1,709.01 | 698.38 |
| Return on Total Assets (%) | 6.46% | 6.95% | 5.91% |
| Return on Equity | 14.47% | 17.53% | 17.38% |
| Gross NPAs / Gross Loan Assets | 0.68% | 0.70% | 0.40% |
| Net NPAs8 / Gross Loan Assets | 0.49% | 0.54% | 0.30% |
| Average Yield on Gross Loan Book | 17.24% | 17.95% | 17.13% |
| Average cost of borrowings (including securitization) | 9.11% | 10.17% | 9.48% |
| Net Interest Margin | 10.10% | 9.90% | 10.32% |
| Capital Adequacy Ratio | 73.63% | 82.49% | 43.64% |
| Number of branches | 190 | 174 | 142 |
| Live accounts | 58,069 | 43,987 | 30,749 |
- Even during the severe wave of COVID, Aptus Value Housing Finance has posted8% growth in the AUM in FY2021 which is higher thyan its peers Among peers, the loan growth of Aavas Financiers (21%) and Home First Finance(14%).
- As is evident from above table, the company has performed quite well on all parameters in last three fiscals.
- Aptus Value Housing Finance is beong offered at a PE of 65.5x its FY21 earnings and at a Price to adjusted BV 7.1x.
- Peers Aavas Financiers is commanding PE of 70.4x and P/Adj BV multiple of 8.7x, and Home First Finance is trading at PE of V and P/Adj BV multiple of 3.8x;
- Aptus Value Housing Finance is good on all counts but little is left on table for investors
- At this stage considering market condition utmost caution is required while subscribing for IPOs which are almost fully priced. if I choose to apply in Aptus Value Housing Finance IPO, it shall be only from a long term perspective. In such case I will also be ready to bear some possible loss on listing if it so happens.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.